[Edaily Reporter KIM YOON-JEONG ] KIWOOM Securities projected that #SamsungE&A’s third-quarter operating profit this year will exceed market expectations. With the company having secured major project contracts in the third quarter and expected to secure additional contracts centered on group affiliates in the fourth quarter, the firm forecast that the upward trend in earnings will become even more pronounced next year due to revenue growth in the high-tech and chemical engineering sectors. It maintained its “Buy” investment rating and a target price of 73,000 won.

On the 2nd, Shin Daehyun, an analyst at KIWOOM Securities, estimated SamsungE&A’s third-quarter operating profit at 276 billion won. This represents a 56.3% year-over-year increase and exceeds the market consensus of 248.1 billion won.
Analyst Shin stated, “While the war in the Middle East and the strengthening of the won are seen as some headwinds,” he added, “there appear to be no major disruptions to construction progress at this time, and high profitability is expected to be maintained.” He anticipated that the pressure on operating profit due to exchange rates would be offset by non-operating income through forward foreign exchange contracts.
The outlook for new orders was also assessed positively. SamsungE&A secured an order for the SAN7 project worth approximately 4.7 trillion won in the third quarter. Following the group’s earlier revision of its order guidance from 3 trillion won to 7 trillion won, the annual order guidance is expected to be raised to at least 16 trillion won when this SAN7 order is factored in.
In the fourth quarter, a number of orders from group affiliates are expected, primarily in the high-tech sector. Most of these are expected to be SamsungElectronics-related projects. It was noted that discussions are underway to bring forward the mass production start date for Phase 1 (Ph1) of P5, and the possibility of breaking ground on P6 within the year remains valid. Construction on Taylor Fab 2 is also considered highly likely to begin within the year.
Analyst Shin explained, “Although the order value for the third quarter is expected to be lower than anticipated due to differences in the timing of final contract signings, since most final contracts will be signed in the fourth quarter, we believe it is possible to achieve the guidance of 7 trillion won in orders from group affiliates within the year.” He also assessed that the construction project for SamsungElectroMechanics’ Sejong plant has a high probability of being awarded in the fourth quarter.
For next year, the firm projected simultaneous growth in revenue and improved profitability. In the chemical engineering sector, revenue from the Padili gas plant is expected to peak from the second half of this year through the first half of next year. The Middle East LOA project (3.2 trillion won) and the SAN7 project (4.7 trillion won), both secured this year, are also expected to contribute to revenue growth.
Analyst Shin stated, “Taking these factors into account, we believe next year’s revenue could exceed 13 trillion won, with an operating profit margin of over 10%.” Next year’s revenue is projected to increase by 24% year-over-year.
The analyst also assessed that the company has a robust mid- to long-term order pipeline. With major projects still in the pipeline—including the $2.5 billion Qatar UREA project, the $2 billion Mexinol project in Mexico, the $3 billion Abadi LNG project, and the $3 billion DG Fuel project—the company is deemed to have ample potential for mid- to long-term revenue growth.
He also highlighted the potential for expanded shareholder returns. Analyst Shin predicted, “Since the company plans to announce a new shareholder return policy starting next year, it is worth considering the possibility of further strengthening shareholder returns in the future.”